Monopoly without tax and without price ceiling, Macroeconomics

Assignment Help:

Here from a), profit maximizing price = 7 and Q = 10. It is shown in the figure below:-

148_Monopoly without tax.png

The consumer surplus is shown in blue area which is given as (9-7) *10*1/2 =10 dollar.

 Monopoly with tax of 50 cents per unit

Here from c), profit maximizing price = 7.25 and Q = 8.75. It is shown in the figure below:-

108_consumer surplus.png

The consumer surplus is shown in blue area which is given as (9-7.25 ) *8.75*1/2 =7.65625 dollar.

 
Monopoly without tax, but with price ceiling of $6

Here from d), profit maximizing price = 7.5 and Q = 7.5. It is shown in the figure below:-

The consumer surplus is shown in blue area which is given as (9-7.5 ) *7.5*1/2 =5.625 dollar.
* Perfectly competitive industry

In case of perfectly competitive,

MC = D

ð  5 = 45-5P

ð  P = 8

And Q from equn i) is 5

So consumer surplus = ½ * (9-5)*5 =10 dollar.


Related Discussions:- Monopoly without tax and without price ceiling

Opportunity costs associated, The opportunity costs associated with the use...

The opportunity costs associated with the use of resources owned by a firm are: a. externalities b. implicit costs c. explicit costs d. sunk costs

Market clearing values of wages, On the next page is a graph of a labor mar...

On the next page is a graph of a labor market in equilibrium, with market clearing values of wages and hours of employment being W 1 and E 1 respectively.  a.  The Federal gov

Institutional mechanisms for promotion of fdi, INSTITUTIONAL MECHANISMS FO...

INSTITUTIONAL MECHANISMS FOR  PROMOTION OF FDI: There is  increasing recognition that  understanding  'the forces of economic globalisation requires taking  a look  at  foreig

Online homework, I want you to do online homework as you did before on apl...

I want you to do online homework as you did before on aplia.com All questions are 10. They are in Aggregate Demand and Aggregate Supply The deadline within 24 hours. Please do

Loretta liver more labs purchased r&d equipment, Loretta liver more labs pu...

Loretta liver more labs purchased R&D equipment costing $200000.00 The interest rate is 5%,salvage value is 20000.00 and the expected life is 10 years. Compute the PW of the deprec

Average cost curve, A firm with a U-shaped average cost curve finds that it...

A firm with a U-shaped average cost curve finds that its revenues exceed its costs when it sets price equal to marginal cost. On which part of its average cost curve is the firm op

Price elasticity, Price 10,9,8,7,6,5,4,3,2,1 QD 0,1,2,3,4,5,6,7,8,9,10 TR? ...

Price 10,9,8,7,6,5,4,3,2,1 QD 0,1,2,3,4,5,6,7,8,9,10 TR? Ed?.

Faced trade-offs, Provide an example of a decision in which you faced trade...

Provide an example of a decision in which you faced trade-offs, considered opportunity costs and evaluated the options by comparing the marginal benefits and the marginal costs ass

Calculate the equilibrium levels of national income, Let a macroeconomic mo...

Let a macroeconomic model be of the following form: C = a + bY D                             a = 10 T = T 0                                   b = 4/5 G = G 0

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd